NLRB v. Mayes Bros., Incorporated

Decision Date22 August 1967
Docket NumberNo. 23710.,23710.
Citation383 F.2d 242
CourtU.S. Court of Appeals — Fifth Circuit


Marcel Mallet-Prevost, Asst. Gen. Counsel, N. L. R. B., Vivian A. Asplund, Atty., N. L. R. B., Washington, D. C.,

Arnold Ordman, Gen. Counsel, Dominick L. Manoli, Associate Gen. Counsel, Allison W. Brown, Jr., Atty., N. L. R. B., for petitioner.

Richard A. Royds, Houston, Tex., for respondent.

Bracewell & Patterson, Houston, Tex., of counsel, for respondent.

Before RIVES, WISDOM, and GOLDBERG, Circuit Judges.

WISDOM, Circuit Judge:

The National Labor Relations Board seeks a decree enforcing its order of June 17, 1965,1 against Mayes Brothers, Inc., a company engaged in the pipe coating and wrapping business in Houston, Texas. The Board found that Mayes Brothers (1) had violated §§ 8(a) (5) and (1) of the National Labor Relations Act2 by failing to bargain in good faith with the International Chemical Workers Union, AFL-CIO, the certified representative of Mayes' employees, and (2) had violated § 8(a) (1) by engaging in conduct which interfered with the employees in the exercise of their statutory rights. The two charges are closely related, as reflected in the record and in this opinion. We hold that substantial evidence supports the Board's findings and we enforce, but modify, the Board's order.


The controversy centers around a bargaining session held June 3, 1964, and on the Company's conduct thereafter. The Board accepted the following version of the contract negotiations.

Before June 3, 1964, the parties were deadlocked on the scope of a management rights clause. They had agreed on all other contract provisions as early as September 1962. In the June 3 meeting Oliver Farr, the Union representative, broke the deadlock by agreeing to accept the management rights clause proposed by the Company. The Union concession was prompted by the Company's offer to grant a wage increase of 12 cents an hour in place of a 6 cent increase previously agreed upon. The parties also reopened the issue whether the contract term should be one or two years. Farr offered to accept whichever period the Company desired but conditioned acceptance of the two year term on an additional wage increase of 12 cents an hour in the second year.

At the conclusion of the June 3 meeting Farr asked Carlton Wilde, the Company attorney, to draft an agreement for the parties to sign. Wilde said he would need three or four days to study what had been discussed. Several days later Wilde informed Farr that he had not yet succeeded in getting H. Boyd Mayes, the Company president, to sign the agreement, but that he would continue to try. Farr telephoned Wilde numerous times thereafter to see if Mayes would sign the contract, but Wilde reported that Mayes had not signed.

At no time after the June 3 meeting did either party raise a question concerning the substance of the agreement. During the last telephone conversation Wilde asked Farr if the Union would accept a letter contract rather than a formal agreement. Farr agreed to consider this proposal and Wilde agreed to draft a letter, present it to Mayes, and send Farr a copy. Wilde never sent the letter because Mayes refused to sign it.

On these facts the Trial Examiner concluded that on June 3, 1964, the parties had reached agreement on all the substantive terms of a collective-bargaining contract and that nothing further was required but the signature of the parties. Accordingly, he held that the Company's refusal to sign the contract constituted a per se violation of § 8(a) (5). H. J. Heinz Co. v. N. L. R. B., 1941, 311 U.S. 514, 61 S.Ct. 320, 85 L.Ed. 309; N. L. R. B. v. Berkley Mach. Works & Foundry Co., 4 Cir. 1951, 189 F.2d 904, 909-910; N. L. R. B. v. Todd Co., 2 Cir. 1949, 173 F.2d 705, cert. denied, 1950, 340 U.S. 864, 71 S.Ct. 87, 95 L.Ed. 631; Sears Roebuck & Co., 1962, 139 N.L.R.B. 471; James C. Ellis, 1953, 102 N.L.R.B. 497; 7 N.L.R.B. Ann.Rep. 49 (1942); see National Labor Relations Act § 8(d), as amended 29 U.S.C.A. § 158(d). The Board rejected the finding that the parties had agreed on all contract terms at the June 3 meeting, pointing out that technically the parties did not settle the issue of contract duration; the Company might have desired a two year contract but been unwilling to grant an additional wage increase in the second year. The Board thought the evidence nevertheless showed that the Company misled the Union into believing that the parties had reached complete agreement and that only execution of the contract remained. The Board relied on this inference, among others, to support its conclusion that the Company had not displayed the requisite good faith in bargaining.

We hold that substantial evidence on the record as a whole supports the Board's factual findings and the conclusion of bad faith it drew from them. See N. L. R. B. v. Walton Mfg. Co., 1962, 369 U.S. 404, 82 S.Ct. 853, 7 L.Ed.2d 829; Universal Camera Corp. v. N. L. R. B., 1951, 340 U.S. 474, 71 S.Ct. 456, 95 L.Ed. 456; N. L. R. B. v. McGahey, 5 Cir. 1956, 233 F.2d 406; N. L. R. B. v. Poultry Enterprises, Inc., 5 Cir. 1953, 207 F.2d 522. The Company contends that it was evident to the Union that the parties had not reached an understanding, but this contention is largely rebutted by the fact that Wilde limited his conversations with Farr subsequent to June 3 to the mechanics of executing "the agreement." At no time did Wilde mention dissatisfaction with the choice the Union had given the Company concerning contract duration or with any other term of the agreement as a ground for Mayes' failure to sign the contract. Moreover the Trial Examiner found that implicit in Wilde's request that the Union accept a "letter contract" was an understanding that the substantive terms of an agreement were settled. He also thought Wilde's proposal implied that Company opposition to the form of a binding contract was impeding execution of the agreement, not dissatisfaction with the Union's position on any substantive contractual issue. Certainly Farr could reasonably conclude from his conversations with Wilde that the Company had acceded to one of the alternatives he had proposed concerning contract duration and all that remained to be done was to execute the contract. Farr's testimony supports the inference that he was so misled.3

The Board did not specify whether the Company deliberately misled Farr or whether, instead, its apparently misleading conduct simply reflected its president's desire not to contract with the Union. On either theory, the Company failed to satisfy its statutory obligation to bargain in good faith.

The duty to bargain in good faith requires the parties to confer and negotiate in a genuine effort to reach an agreement if it is possible to do so. N. L. R. B. v. Montgomery Ward & Co., 9 Cir. 1943, 133 F.2d 676, 146 A.L.R. 1045; N. L. R. B. v. Reed & Prince Mfg. Co., 1 Cir. 1941, 118 F.2d 874, 885, cert. denied, 313 U.S. 595, 61 S.Ct. 1119, 85 L.Ed. 1549; N. L. R. B. v. Boss Mfg. Co., 7 Cir. 1941, 118 F.2d 187; Globe Cotton Mills v. N. L. R. B., 5 Cir 1939, 103 F.2d 91; see Cox, The Duty to Bargain in Good Faith, 71 Harv.L.Rev. 1401, 1412-18 (1958); Smith, The Evolution of the "Duty to Bargain" Concept in American Law, 39 Mich.L.Rev. 1065 (1941). The Company's failure to object to the choice the Union gave concerning contract duration is strong evidence that the Company considered one of the alternatives acceptable. Not until the Union filed an unfair labor practice charge, four months after the final bargaining session, did the Company mention the failure to settle the contract's duration as an excuse for its refusal to sign a contract.

If the Union's offer concerning contract duration was in fact acceptable to the Company, a fair inference, it was proper for the Board to conclude that the Company was guilty of bad faith in refusing to execute the contract. A technical deficiency in the agreement is no defense if a desire not to contract with the Union in fact motivated the Company's refusal. See Lozano Enterprises v. N. L. R. B., 9 Cir. 1964, 327 F.2d 814; Tulsa Sheet Metal Works, Inc., 1964, 149 N.L.R.B. 1487, enforcement granted, 10 Cir. 1966, 367 F.2d 55; Ariel Offset Co., 1964, 149 N.L.R.B. 1145. If, on the other hand, the Union proposal was not acceptable to the Company, the Company was under a duty so to inform the Union. Its failure either to sign the agreement or to advise the Union why it would not sign is inconsistent with any sincere intention to compose differences without unnecessary delay and therefore is not good faith bargaining. See N. L. R. B. v. National Shoes, Inc., 2 Cir. 1953, 208 F.2d 688; Artistic Embroidery, Inc., 1963, 142 N.L.R.B. 974, 982; Stanislaus Implement & Hardware Co., 1952, 101 N.L.R.B. 394, enforcement granted, 9 Cir. 1955, 226 F.2d 377. If the Union position on unresolved contract terms prevented the Company from executing a contract with the Union, Wilde's conversations with Farr were obviously designed to forestall, and did forestall, a continuation of negotiations on the substance of a contract.

Wilde's conversations with Farr are not the only evidence of the Company's intention not to reach agreement with the Union. The Examiner found, from uncontradicted testimony, that after the Union capitulated on the management rights clause President Mayes declared he would rather give a 25 cents an hour wage increase than sign a contract with the Union. Wilde himself testified that the Company asked the Union representatives why they were so persistent in their attempts to secure a contract and pointed out that the Union had given up at other plants.

Moreover the Examiner found that subsequent to June 3 the Company engaged in a program of Interference with the object of dissipating the Union's majority, in violation of § 8(a) (1). John Dyess, a...

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